haidi: good morning. i am haidi stroud-watts in sydney where markets have opened for her trade. shery: good evening from new york. i'm shery ahn. to "daybreak:e asia." ♪ haidi: our top stories, backing for brexit. theresa may cap -- claims cabinet support, but lady euro skeptics warn the will be voting against it. the situation has changed dramatically. northern ireland will remain in

the customs union. seen a gainsng has made on news that asia-pacific markets will digest the deal and what seems as a muted start. also had fetched -- have fed chair powell speaking, talking about a strong u.s. economy, pushing up the dollar. how he is not concerned about the recent market selloff we have seen. all of this being felt in asia. a bit of a mixed picture right now, sophie. sophie: that is the case paths and nikkei 225 opening lower by a 10 sub 1%. as he shares are closing with a two-day decline. worst since february 6. stocks in new zealand underwater off by one third of 1% or u.s. futures are also edging lower. we are seeing firmness coming through for the dollar. and the u.s. 10 year yield. a three spot 12. taking a look at elsewhere, when it comes to eco-agenda, what jay powell had to say about every

meeting, that is food for thought for central banks in indonesia and the philippines. waiting on trade figures from india and indonesia and home prices for october as -- at 9:30 a.m. hong kong time. at the bottom of the hour, the aussie dollar study after a two-day gain. the aussie is rebounding a touch against the kiwi dollar after falling to a six-month low. penciling in 105 for the early 19. expectations of the rb will move to tighten in a years time in light of strong data points. we will get a better sense of new zealand's outlook when the prime minister joins us momentarily from singapore with our own haslinda amin. trading hours will start later today for the college entrance exam. sophie kamaruddin on the markets. let's get you to first word news. changes on capitol

hill after the midterm elections posed problems for president's new north american trade deal leading house democrat to say the so-called agreement means changes and must be renegotiated if the administration wants party support. he added that democrats concerns will likely be addressed by including stronger enforcement mechanisms. trump administration is defending the banning of cnn sayingondent jim acosta journalists have no right to enter the white house. the network and a justice department have been arguing in court with the white house lawyer saying the president has brought discretion over who merits a press conference. the hearing has ended. the judge says he will deliver his ruling later on thursday. oil snapped its record losing streak on more signs opec and independent producers will implement output curbs next year. the cartel says all sides are discussing you -- be brave and anticipated restrictions to balance the market as demand for oil flips. crude traded over $55 is week.

for the first time in a year. it is trading around $66 a barrel. foroin fell below $6,000 the first time since august. reaching its lowest level in more than a year or the world's largest cryptocurrency dropped as much as 15% with most of the loss coming within a half hour window. other coins fell including seeing sharps, declines. bitcoin is down 70% from its record in december. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jenna dagenhart. this is bloomberg. thank you. it took a meeting that lasted five hours, but prime minister theresa may has managed to convince the eu. it would mean keeping the u.k. in a single custom zone with the

eu until a solution is reached on the irish border and gives scope to extend the transition period. is here.hays the irish border issue remains a contentious one. it does look like some progress is being made. certainly theresa may got this deal. eu.pages agreed with the this is been going on since june of 2016. she did get her own cabinet to agree. one of our latest stories, on the brink as stories plot to kill her brexit deal, the growing revolt within her own party. at least two senior ministers are said to be considering while scores of conservative members are lining up to vote against the accord that her cabinet grudgingly agreed to. she said, look, it is my deal or you risk the hard retreat, you risk right -- risk chaos. it is something she has done the

best she can. i am sure that is what she thinks. if you read this, there is no easy way out of this. to me what is so interesting as they are ready to start talking about the revolt and leaving the party and pushing. there is more talk about forcing another vote, forcing her out of office, having a new prime minister step up. it will be interesting he wants to step up and where that leads. this is something that everyone will lose something if the deal goes through and the u.k. brexit. shery: it was a very intense debate and we heard reports of lawmakers crying, shedding tears. what are the key issues right now that remain? we have been talking about this. it is one of the hurdles and a long process. kathleen: the biggest one has remained the northern ireland border. because in order -- and they have been talking about this. what is the backstop. ? come to is if northern island and the customs

union, that is what the agreement is now, and this transition period has been extended from march 2019 through maybe wef 2020, then can agree on something. but how do you keep northern ireland and the rest of ireland irelandst if not other is part -- if northern ireland is part of the u.k. and the u.k. believes in that. that is why this is tough. the pro-brexit tories oppose this. they think too much is being given up. want to trade with them but we want to make free trade agreements to the democratic union party has also been concerned about what it means. this is something that is so hard to solve. it remains to be seen what happens. going to parliament, i don't know. has just-- the story begun. keep watching your bloomberg. the headlines will continue to fly back and forth. of headlinese tons coming out of jerome powell speaking at the dallas fed. this gtv chart, i want to show

the financial conditions in the u.s. they have been falling since that that has been hiking rates. not as much as we have seen the global financial conditions fall. when you were listening to chair powell, did you get a sense he was optimistic about the u.s. economy? or to the downside? kathleen: i don't think he is concerned about financial conditions. though they have not moved as much as you expect. the economy, he said, is healthy. he seems very upbeat on the economy. at the same time, when he listed challenges -- he was interviewed at robert kaplan. you did a great job. you could have been tougher on your follows but he did a great job. one of them he said was how much ofhike rates and the pace interest rate hikes. i would submit to you that jay powell is giving us a small nod to the fact that some people are afraid that he is oblivious to the fact that he will do too much. he also said he is watching housing closely.

it has been slowing. mortgage rates are up. he is not worried about stock market volatility. it is one of many factors. it is important to the fed. not a big deal. we will get a december hike. the question is how much we will get an 2019? -- in 2019? haidi: kathleen, thank you for that. lots of great conversations this morning. it's good to singapore with reaction on what this means for investors. is there with us. one of the interesting things i came out of that long conversation between rob kaplan and jay powell was that this kind of sanguine attitude that the fed chair took toward the equity market selloff, saying if there is one component of the broader economy that he has to worry about, he is not too worried about it at this point. that suggests the fed will take the market selloff into account. when they set policy. good morning to you.

i think what we have seen with the comments coming through, once again, the fed themselves are the ones that are very consistent. we have lowering data to drive things as we move forward. i think it is something the market has not been adopting. i think with expectations that were berlin, i don't think we have changed very well with the november meeting. i think the market is worrying is the fact that it might manifest itself. at that point of time, the fed may have to pay attention to the items. there is something that i think the market will come into 2019 as we move forward. at this current point, the data is holding strong. moving forward, there are other indicators that we need to be aware of. haidi: one of the other things

this ideabout was that the trade, not having much of an impact on the data. at the same time, it seems to be civility of what the fed is aiming for with every meeting being live with the press conference. does that create greater volatility for market expectations given that every month will be a possible live meeting? i would say given the market pullback has a lot to do with sentiment. especially for the reaction in october. quite a bit of this pays attention to the fact that there is uncertainty and with respect to the worries for the fed. given the fact that the expectation is waiting for a slowdown, i would not be surprised if the fed should see an opportunity to hike itself in 2019. and without putting things into a live meeting as we have heard

from jerome powell himself, in -- having theould opportunity to raise rates higher to the point where they could no longer do that anymore. shery: chair powell also talking about the u.s. economy being really strong and that pushes up the dollar. he seems to be very content, very happy about the state of the economy. what does that to vote for the greenback? i think in terms of the strength of the u.s. dollar is something that we have been reckoning with to the end of the year. side thate political we have seen from structural factors, and the monetary policy point of view. moving into the new year, my expectations of things is there could be more of an upside,

depending how much more we can see. , that the fedions may see limitations moving forward. seeing the inflation rate is going on strong, and how much more this could come through. it remains with a little bit of doubt, and optimism we got to trade tensions that we can see it change with the high-level meeting that is going to be expected. not to mention oil prices. rebound does materialize, how much further, remains in doubt. at the end of things, i will say it looks like there could be limitations going into the year. shery: you mentioned oil. chair powell did not mention the tumble in oil prices. he did mention tariffs could lead to higher inflation. how will those two factors play out? jingyi: it is a bit of a mixed

picture. the fact that we could see a rebound. in terms of how it translates to the economy, i think there is a limitation. with the tariffs, i would say we get a movement over there. it is also reflected that there is a rerouting in terms of how things have been going. trade tariffs, my view is that it could even chile come into the picture. isterms of how much, that the part that continues to rally into the new year. shery: thank you so much for your time today. "balance of power." --jingyi pan, thank you. they beat expectations. we will look at the numbers later in the show. haidi:, we will speak to new zealand's prime minister jacinda ardern at the summit taking place in singapore talking

geopolitics, trade, and her country's interest in the region. this is bloomberg. ion. this is bloomberg.

this is "daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn. apple is in its longest losing streak for more than six months as investors reassess its growth prospects amid demands for iphones. shares extended their slump, losing 11% over the last five days. and raising more than $100 billion in market value. apple's year to date gain is now about 10% down from almost 40% in early october. haidi: tencent has bought itself time to find an answer to installing game business by beating expectations of the september quarter. net income reached $3.4 billion banked on windfall from an investment.

grew at theenue slowest pace in three years. this as china's clampdown hurt the tencent green and broader division. shery: regulators are discussing whether to issue a self-care fix for the 737 mac, last months crash in indonesia. the disaster is linked to a glitch back in order the plane to enter a steep dive. boeing and the faa say they are a value in the need for upgrades including operating procedures and training. boeing stocks fell for a fifth the day. lots more to come, including our conversation with the new zealand prime minister jacinda ardern in singapore as she prepares to step up for the meeting in singapore and heading to aipac in new guinea. we will be live in singapore up next. this is "daybreak: asia." you are watching bloomberg. ♪

haidi: this is "daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. global leaders are in singapore for a series of regional summits this week. among them is new zealand's prime minister jacinda ardern who will be renewing her country's keith to be exempted from u.s. tariffs on steel and aluminum. wherehead to singapore haslinda amin is joined by the prime minister herself. haslinda: great morning. good to have you with a spirit you talk about trade being front and center. of course, the issue right now is president trump himself did not turn up at a time when trade is front and center. one is looking for commitment from him. what do you make of his absence? was it a mistake? pm ardern: ultimately, leaders make a call around the presence at the various in different

anyms that are available at given time. having the presence of the vice president also incredibly important. leaders will be making the most of their contact and there opportunity to have a conversation. of aussie on, but also some of the ambition. for instance, the trade agreement which has been a hot topic of conversation for all of us. haslinda: speaking of the vice president, you saw him at dinner at his request. what did you discuss? pm ardern: totally self-interested. i came to promote the benefits of free trade. particularly from a country like new zealand. we are a trading nation. isolatedographically but he really -- we are linked to the world throughout our trading ties. for us, maintaining the rule space order is incredibly important. that does mean we have a job to do domestically.

aipac nations have been discussing for a couple years now, how do we create greater inclusion of prosperity? how do we ensure more people benefit from trade? i think,e have seen, in some corners of the world, a push back domestically from people who do not see the benefits. who see the cost of globalization. rebuild that to mandate through a trade for all agenda. i'm trying to promote that if we follow a rules-based order, followed the trade rules we have agreed to and expand trade options, but take upon ourselves the domestic responsibility to see everyone's well-being lifted, we will succeed. haslinda: did you manage to convince the u.s. to make an exception when it comes to steel and aluminum? a big issue. pm ardern: i use every opportunity i have to raise it. it has been raised by the united states, the issues of that we happen to be one of those countries.

andunited states is welcome i did raise it. but it was a conversation amongst many other things. haslinda: did you bring up the issue of tpp? did you try to convince -- pm ardern: for me it is about talking about the journey we went on. there was a view with an hour domestic population that ct ppt was a very different trade agreement. but that we had been concerned about it when we came into office, we were concerned with a doing our best with rebalancing the agreement. we reached a place where we were happy with the rebalancing. haslinda: is it a different thing without the you -- without the u.s.? pm ardern: it is. there would be a negotiation off the back of that. haslinda: you get a you -- i sense that the u.s. might be interested in rejoining? pm ardern: that was not the nature of my conversation. see a focus from them on bilateral trade rather than multilateral trade agreements.

regardless, from our perspective, multilateral works for us. when you are a small trading nation, that is a you reap big rewards. it has been stalled, countries like china and singapore wanted to push through by the end of the year. that is not likely to be. what caused the stall? pm ardern: we are looking into 2019 p we have roughly seven chapters that are looking good. a bitthink there is still more conversation to be had around services and investment. from our perspective, it is about balancing pace with quality. we do want to see additional benefits derived. pushingwhy we will keep two what has already been negotiated. but see if we can push further. it is a significant agreement. i think we will demonstrate the benefit that can be derived in this region from is having those multilateral agreements. haslinda: is it being driven by china? pm ardern: no.

that is not a concern. certainly from our perspective. notng sure that we do sacrifice quality simply for pace. particularly given it has had a lengthy just station. we have derived as much from it as we can. haslinda: can they coexist? pm ardern: yes. currently and absolutely. i think the conversation about the two is whether or not we are building on tcc pp. absolutely. haslinda: are there concerns down the road? wendy you see the other member nations joining? right now, it is limited. will be the most significant multilateral agreement in terms of the membership base come in terms of the value of what it will cover. i think often, those who are -- you have not been part of the agreement, will look to see what benefits derived from them.

i mentioned it will probably be the case of that. haslinda: what are your views on the u.s.-china trade? is it getting better or worse? what are the indications you are getting in your conversations with the rest of the global leaders? pm ardern: from a domestic perspective, it is having an effect in the sense that business confidence might be affixed by looking out and see what is happening as a result of the trade conversations going on. that it might be having an impact on global growth. from our perspective, we want to 'ske sure that if the world leaders, new zealand doesn't catch a cold. there is something to be said about the architecture of trade we see no benefit for tit-for-tat trade. really abiding by this trade rules and agreements and norms we have signed up to. as ofda: we also have had

late what is called the pacific reset. moreealand seems to be engaged in the pacific. what is the thinking behind that? is it a way of balancing the increasing insolence from china? pm ardern: i have that question a lot. it is more about us. weare a member of the -- have a unique relationship with members of pacific nations. connections around the country's constitutional arrangements. we have simply been on that basis, we have to move away from this relationship new zealand has had. haslinda: what is prompting that? pm ardern: it is just values that we as a government have. we should -- it should be about partnership. doesnefit when the pacific well. both economically and socially. we have a responsibility on

issues like climate change to be real advocates alongside the pacific. now is the time to reshape our relationship. that is how we see our relationship with the pacific. haslinda: is there no concern at all that china is perhaps more engaged in that part of the world, investing a lot through its belt and road initiative? pm ardern: there is a change in the presence of a range of different issues in the pacific. that actually should not be the basis on which we reflect on our own relationship. that is actually about us. it is about the pacific and us doing our bit. haslinda: what about the new property,onomy, housing is one of the huge issues print since you came to power, you have banned the sale of residential properties to foreigners. has that worked and where do you see that headed? haslinda: -- pm ardern: i think that is as bringing ourselves into alignment with a number of other nations which we compare ourselves to the likes of australia. what is surprising is not so much that we have done that, it

is that it has not existed in the first place. we really want to send a message that new zealand is open to investment. we wanted to be productive. we derive and investors derived a better benefit than just a housing market. , saying that in terms of infrastructure, things like --els and transport, we need we are open for business. we have a supply issue and a demand issue. demandabout dealing with . on supply, we have seen the market failed.

state are partnering with developers to make sure we are putting more supply in that area to ease the market. haslinda: looking for more affordable housing. it is overly ambitious, some say. we were looking at 16,000. really using some of the technologies. step into that sells market and even to go into stand back and say we need to give up prime ownership. haslinda: for cities like auckland, there is a cause for concern with you. pm arden: absolutely. we are making very poorly, but some of our values, the idea of home ownership.

whoever chooses to call new zealand home, i'm not giving up on it because that is how people build community ties. the kids remain in the same place in education, so much around urban development is around the quality of the communities that we build. haslinda: you talked about climate change. what other priorities for you? pm arden: we signed up for the paris agreement. we are trying to establish , beyondew zealand political cycles. we are working on that at the moment. we are striving towards neutrality by 2050. we want to have electricity generation completely renewable by 2055.

encourage newly technologies because we have a lot of work to do on transportation. haslinda: will that involve getting rid of fossil fuel vehicles russian mark how you get everybody on board russian mark -- on board? pm arden: we just started heavy infrastructure. for those that are in -- interested, to give our community or is alternative. andant to invest in rails to make sure that we have those alternatives. is actuallyr issue food production. of our emissions profile. we want to ensure that we are the most sustainable, most

productive, highest quality and most trustworthy crude producer in the world. we will be looking for ways to demonstrate that through our new technology and new ways of farming. haslinda: you are the youngest female prime minister. to the your advice millennials listening to you out there? politics has not necessarily been the aspiration of many, but it is a place for you to make remarkable change. i would really encourage people who might look to political leadership, who might not see themselves there, but you can be your own leader. you can bring that the and kindness, whatever traits you value to the job. haslinda: a pleasure to have you.

great conversation there. number when itut ussie data.e a economy. added to the jobs.d up to 7800 that contributed to the unemployment rate. tick higher.ting a unemployment and part-time unemployment there. my .5 -- nine and a half thousand. let's take a look at how the aussie dollar is reacting to all of this.

a little bit of a rally is beats.with this and that october jobs data, traveling -- there are some concerns regarding the trajectory for economic growth. rba says it will not see the case for a rate move any times soon. it is expected to do away with td securities. byightening is expected november 2019. that is helping the kiwi dollar gain ground. today we are seeing some strength for the aussie dollar. the kiwi dollar is holding steady this morning after a two day rise. earlier we had the prime minister of new zealand speaking

to a haslinda amin about the trade war. take a look elsewhere. the nikkei 225 resuming the decline. also wants to highlight what is going on. crude trading. we are seeing believes that we saw midweek. halt the longest losing streak on record. jumping 8.5%. the industrial machinery maker listed its profit forecast. the cable partner up with tokyo century on expensive capital investment in light of growing demand for automated production. we are seeing japan gaining ground on the back of its result. climbing 3.5%. the stock has upgraded to neutral at j.p. morgan.

-- lender is forecasting losing ground this morning. the bank did meet estimates for the second quarter and listed it net income forecast, but we are seeing pressure. -- halfwayr to the to the fiscal year. shery: thank you so much for that. let's get the first word news with jenna dagenhart. jenna: theresa may is claiming victory in her fight to win a brexit deal. she emerged from five hours of talks with senior ministers but admits more battles lie ahead. thatpeople say it implies the vote was not unanimous. a skeptic has said that he will not support the deal. out ais said to have laid

series of concessions to the u.s. the first time ahead of top at the g20. -- talks at the g20. we are told the idea has fallen short of the major structural report that washington has been demanding. the first members of the migrant caravan heading towards the border have arrived in tijuana. 357 with another group set to arrive in the coming hours. the u.s.umped into side but quickly ran back while being watched by border agents. years onged most in 16 the possibility that its equipment sparked one of the catastrophic wildfires in california.

a sign of growing financial stress. the damages from the fire in northern california may total $15 billion. that is far more than pg&e has on cap. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. be third-quarter expectations. a whopping one-time gain from its investments. china slowed revenue growth. edwin joins us now. suggestion that they have any longer term answer to identity -- a pretty big crisis. >> that's right. we saw the early analyst

reaction. i think most people are a little disappointed that did -- tencent could not offer more visibility. right now, that is one of the biggest overhangs of the stock. we saw some parts of tencent step up to offset the damage. online advertising group pretty strongly. if this game approval processes that clarified quickly, in the rally we see in tencent will be short-lived. haidi: what sort of changes would need to be made? you have heard other executive talking about the industrial internet, which is a fancy term for being more

enterprise customers. the cloud division more than doubled its revenue in the third order, which is a manifestation of what they would like to see. enterprise is stepping up to the plate and supported what has been up until now it can humor internet driven business. it is not an easy transition. alibaba is way more advanced field. stating -- aimply cloud business needs enormous amounts of investment. tencent right now may not have as much of a cash flow as it used to in the past. lose: we have seen tencent $240 billion of value. this chart on bloomberg showing that valuations dropped. it is at the cheapest level in five years.

analysts are pretty positive about the stock. could we see a rebound in prices? the bullishness is based on a very long-term projection. just looking at this enormous user base, we keep hearing the world's first super -- and a lot of ways that is true. there are ways we can get more revenue. them, i of serving think tencent continues to be can derivative about plugging it social media feed with advertising. an entire ecosystem around where you build video content and all of these services, where in the future, it could be important

money drivers for tencent. surprised to see these earnings pretty positive. very disappointing numbers from other companies like alibaba and why do. ido.adio >> it is more like the results were better than feared. it was not a complete disaster. after $240 billion selloff, the consensus is for some kind of bounceback. the question is whether that can basis eight. one of the biggest things they can do right now is clarified the gaming situation. say more than half the questions were about this very specific issue. investors do not like the uncertainty.

shery: our asian tech editor. aim at a is taking chinese startup ahead of its earnings next week. the company has seen its stock inds since its peak september. blue or god founder told us there is more pain ahead. >> reports to be the third-largest e-commerce the. hype machine.reet let's talk about the company. this is the third-largest e-commerce company after alibaba. it has a 19 alien dollar market cap. i read your report. you have identified a host of issues with the financials. give us your thesis.

filings showocal that revenues are overstated and net losses are greater than what they reveal. their headcount is larger than what they tell you as investors. we think there is an undisclosed third-party and we think the headline is widely exaggerated. >> let's cut to the chase. the stock is trading at $17 and change. down from a high of 30 in september. what do you think it is worth? we do in adjusted price and we still think we are being generous with the multiples that we give them. confusingvestors are popularity with profitability. richink it is trading at a valuation. performance.

>> that access to what number? see theou can profitability over popularity. next, one country says it is eating some gains from the trade war. this is bloomberg. ♪

haidi: this is "daybreak: asia." says ithe philippines is actually benefiting from the ongoing trade war between the u.s. and china. says the rivals both see his country as an alternative manufacturing have. in the long term, it will

cast a shadow is the trade tension will not stop or decelerate, but as of the moment, the impact is quite minimal. only because we still maintain a very good relationship with both countries. growing, much faster growth than the last two years. anything double-digit, close to 30% growth. the same thing with the u.s.. u.s. is our number one work market and china is our fourth largest export market. china is our number one source of imports. these are major trading partners for our country. they are important.

be are in a good position right now. definitely, in the long-term, many countries would say this would lead to slowing down the global growth. the estimates are being mentioned. trade getting affected by a single digit impact. close to 10%. us, thewhat will worry way, the magnitude and growth of our exports to these countries. to a certain extent, we are receiving inquiries from both countries, looking into the philippines. we do manage the risk and spread

there. way, you can say we have some gains with this development. >> global growth of artery been cut by the imf. how do you mitigate the risks to the economy? >> we have to keep finding the right products and offer what is there. looking at nontraditional markets as well. we are talking to russia, stronger ties with middle eastern countries, so we are looking at nontraditional market. that is our way to grow our exports. the philippine trade secretary's again to haslinda amin in singapore. lots more to come on "daybreak:

asia." this is bloomberg. ♪

haidi: this is "daybreak: asia." air quality in beijing expected to remain the worst in 18 months on thursday with levels of particulate soaring to 11 times the world health organizations safety level.

beijing's polluted air is below highs reached in recent years. haidi, i know you lived in beijing, see you know what it is like. haidi: i lived in beijing at the peak with winters where the measurement where -- were literally off the charts. it makes incredible features. they completely disappear. as you go into winter, a lot of these ours till burning coal despite what regulators have been trying to do to make things greener. shery: not surprising on social media. the buildings are gone. this is something that i do not

miss about hong kong. you got that pollution coming in and being blown by the wind goes. -- when. -- the winds. >> not seeing a lot of math here. a couple days ago, there were reports that there was a toxic cloud over the city. that those in serious health risks. it was the highest that we have seen. we are not a victim of this pollution that we are being, but speaking of clouds, is the cloud being lifted when it comes to 10? that earnings report came out

tonight. investmente offsetting the slowdown. we will speak to billy. he said he is pretty cautious to cut his price forecast for the next 12 months or so. haidi: forget over to bloomberg markets: asia, take a look at the trading. seeing a much better picture in asia. markets recovery in oil . ♪

rishaad: welcome to bloomberg markets china open. jay powell of claim fed is increasingly thinking about the case of rate hikes. it is seen as a need for caution. >> theresa may claims that the cabinet backing for her draft, difficult days look -- my head. yvonne: trade, tariffs and regional interest. raising good point.

rishaad: the jpmorgan event taking place here in hong kong. the outlook there. what does 2019 hold? jennifer is the global chairman and will be on in about 10 minutes. yvonne: perfect timing. it is interesting, not much to get optimistic about the markets. you heard from the fed chair jay powell. not really any indication that he would be hoping -- halting this rate hike too soon. we will have to see what tencent

does. that will affect how they trade. let's have a look at that we can. tencent, big earnings. we have seen analysts come out and keep their forecast. some of them have cut their price targets for the stock. up, what i wanted to mention is where we go with the dollar. obviously the chinese renminbi. whether or not they will hold the exchange rate below seven, and a lot of ways avoiding any unnecessary dramatics or rhetoric when it comes to the currency there. place, wegs taking had employment numbers out of australia today. yvonne: that was quite volatile.

of course, we will talk about the consent earnings. what a blowout when it came to the earnings. people were expecting single digits when it came to growth. we saw double-digit. one-time investment gains really helping out some of the weakness and pressure that we see. david: for a long time we were waiting for the other investments to show up in the financial statement. it showed up in a one-time big-time way. a price target of 430 on tencent. the other story is the fed. yvonne: jay powell maintaining his positive view.

of the dollar, he made it clear that policymakers are watching the economy closely to make sure that rate hikes are wanted. david: kathleen hays is on the story. where do we get started? proud aboutind of growth. kathleen: absolutely. it was not casual. it was very serious. there were jokes made. a great job of interviewing jay powell, but he talked about when he joined the fed how weak the economy was and how it started to normalize. he is saying that the fed has done a good job. the economy is very strong and healthy. answer to one of the questions about the fed said hees, jay powell

is watching the pace of rate hikes. i think he gave us a little not tocern that he is oblivious the fact that the fed has done too much in the past and could do it again. >> there are challenges that are typical at this point. we need to be thinking about how much further to raise rates and the pace at which we will raise rates. the way we will approach that is to be looking very carefully at how the markets in the economy and this is contacts are reacting to our policy. kathleen: he thinks things are looking pretty good right now. he said it is something we're watching very carefully. housing, auto sales, very sensitive. shortages ine are the u.s.. , they pricees people out of the markets, but mortgage rates have risen,

making them less affordable. that is something that they are watching as well. yvonne: we're talking about trade war stock market volatility and risk aversion. what does jay powell say about these risks and could it slow down the rate hikes? kathleen: when it came to the possibility, he said the economy looks different -- if the economy looked different, he would be more worried. market come hek talked a lot about it and what a big part it can be of people's decisions, how it used to be stronger for people to spend more of that wealth. >> when prices are high, people will bend over little bit of that. it is not a big change.

thate would need to think increase would be sustainable before they spend their wealth. when prices go down or volatile, we pick up. it is one of many factors that go into a large economy kathleen: -- large economy. kathleen: one of many factors. it is sort of an issue, but not a big one. the 18 year chairman of the federal reserve was speaking at new york university today and policies aretrade insane and everybody loses. if you are the aggressor, you do not lose as much, but it is like a tax on people of the world. he can say the kind of thing that jay powell might say if you were not chairman.

he said we have laws and rules that give us independent and help us do our jobs. another settle but strong statement, not being too worried about donald trump. david: thank you. our global economics and policy editor. there is some progress on these trade talks. here is paul allen in sydney. out: china has laid potential concessions to the u.s. for the first time since the northern summit. talks between president trump and president xi jinping. idea of majore structural reforms that washington has been demanding are ost army hashes --

rehashes. admitted more battles lie ahead. observers say that the vote was not unanimous. these documents were the result of thousands of hours of hard negotiation between officials, one of many meetings that we held with our eu counterpart. i firmly believe it was the best that could be negotiated and it is for the cabinet to decide whether to move on in the top. create the single territory. in this same custom territory as the rest of the

u.k. remaintion, it would aligned to the rules of the single market. oil snapped its record losing streak. the cartel says all signs of testing restrictions to balance the market as the demand for oil slips. the dollar strengthened with above average growth. created 32,800 jobs last month, comfortably ahead of expectations of the 20,000 gain. part-time jobs fell by just under 10,000. the unemployment rate held at

5%. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. ahead, troubles are not over yet. challenges facing the company and other chinese tech players in the coming year. yvonne: we assess the need for the tech sector with one of wall street's most senior bankers. we are live at the j.p. morgan conference, next. david: you can join the conversation. tv is the function. send us your comments, questions or any comments you might have. ♪

rishaad: back here with bloomberg markets china open. our next guest is senior wall street banker. chairman for investment banking. what is the conference about? >> there is a lot happening in the market right now. newt of excitement around areas of technology that have everyone super interested. sharing economy. we just came off singles' day, which was phenomenally successful. the mood is very good here. we have seen how these companies have been battered. still decent valuations. it has been a rough couple of

weeks, no question about that, but there is still a lot going on at all of the major tech companies. s.a.p. jumped in and went $8 billion on an acquisition. these are bold moves. advising on both of those yields. it goes to show where companies are focused. it is the future. innovation and growth are not stopping. there is a lot to be bullish about, despite the recent market activity. rishaad: we have seen reallocation out of these stocks. should people be avoiding them? >> they are too big to ignore. all trade is off a little, they are very big and powerful

companies. we have seen them trade down before. we have seen apple and netflix are through this. higherthey are back and than before. rishaad: how you navigate volatility? they are too big to ignore, but maybe get them cheaper in a week russian mark -- in a week? >> possibly. people need to turn their screens off. it is impossible to ignore. rishaad: are you saying evidence of april delaying coming to the market? are companies delaying? >> it is an interesting activity. if you are at the starting blocks right now, you might wait and watch the market.

if you are thinking about going public sometime next year, you might be accelerating plan to get in while the market is still relatively good. rishaad: one of the strongest years for chinese companies. do you expect that to continue? >> idea. the ipo market is wide open and we have lots of companies getting ready to go. is tost important thing be ready to go so that you have that option. rishaad: how much will be driven by organic growth or will it be based on case-by-case examples? it was literally about to go public and was acquired in that. company is intending to go public will probably evaluate

both options. that is evaluated throughout. rishaad: you have these massive companies. they can survive on their own and become one of those big boys or will they be taken out by competition? >> there are a lot of big companies in china. have very big market caps. but will be hard to take, we are seeing big companies emerging all the time and it is a competitive environment. question.ast what is getting you excited looking towards 2019? what will be the thing to watch? >> i think the pace of innovation is remarkable to me.

even working at j.p. morgan where we spend about $10 billion a year on technology to institute aia and cybersecurity, it is the constant, relentless case of change and innovation that needs capital, that delivers growth, that gets me up talking everyday. thank you so much for joining us. david: the renminbi came out 693 692. will be interesting is coming up. we are talking tencent and earnings. why our next guest cut their price target. ♪

yvonne: the one to watch this morning. tencent jumping as we were expecting, given what the options were yesterday. up from 4%. that one-time gain when it came to investments. finding an answer for its lackluster gaming days. david: much more quiet than analysts were expecting. research.f equity you cut your price target. >> just a little bit. better thanswer was feared. gimme slow down, advertising slow down and other business slow down. this was better than expected.

yvonne: one thing that caught analysts off guard was the lack of mention about the gaming approval process and what will happen. they just that there is not a lot to update. they are in a limbo situation here. they have a bunch of games that they want to monetize. money off ofake it. how much of this is based off of that the freeze will end soon. is fair -- they mentioned in the last quarter that they had views on the regulatory front. even during the prepared remarks , they mentioned that they have games in the pipeline. there are indications of the game sector at least. reportatest report, the , therehe results report

is good reason to think that we lift see a list in the -- on the ban. david: did the same rates of growth and revenue return or businesshange and the model needs to be revisited, not looking at the same tencent that looked invincible up until a few months ago? argument would be saying if you look at the revenue structure before, it is mostly viewed towards its games. lowern't games call for #it is hit or miss. my argument is if it is moving away from game, shouldn't it be a better rating? when we look at next year, i think the upside will be large. a low growth for games because of the ban.

i think we will see fortnight being monetized. we are looking -- working from a low base for games. we could see to sing growth. advertising was very strong. they took steps of boosting their inventory. can they continue to do so? >> yes. i think they could offset it. it is very under monetized. metric to look at is on the moments. seeing ton is still as per day. that is the price that you arrive at. is whattion i have

discount rate are you using? has that been brought up? >> correct. good point. in terms -- i have been using 11%, which i think is fair. 2% in the long-term. is the profile. we have the index stock at 24%, trading at a low. risk rewards a business as well. been a it has always hope stock. billy costa grande. we'll talk more about the tech sector. tencent, we are ready see that topping at the open. we will see how things go once the floodgates open.

up more than 200 points for hang seng. continues for the renminbi. david: this is bloomberg. ♪

yvonne: 9:29 a.m. here. things are getting a little bit chilly here. counting down to the open. of 200seeing a bump up points at the open. that tencent earnings beat that we just talked about and we are seeing 4% on the market. turning things around for the tech sector. we did see alibaba with a little more, looking bearish on the outlook. david: we will be bringing you back to the conversation in a couple minutes. not a big event.

it was mentioned in news reports that they expect to cut the rrr ratio by more than .5%. what is expected is more stimulus. we do have the open in china right now. let's have a look at how we are preparing. there we go. 3.1%. let's wait for shanghai to get warmed up. we are waiting for data here. price data coming through any minute now. we will see when it comes to tencent is up close to 4.5%.s. the property sector has outperformed the last couple weeks or so. a lot of these investors looking ahead to the policies of war, given that we have to price in

slow down a little bit. perhaps we could be seeing those property curbs eu when it comes to the index. he are seeing some gains overall in the hang seng property index this morning. still with us is really. still here. talk about the broader sector. everybody has been talking about how dispersion is going to be -- to be the big thing. what does it tell you for next year? is this more about a seasonal thing? do think this is a normal -- a new normal? we have been seeing internet companies revenue and growth slowing down. just accounting for this lower

growth. we will see a continuation of that, but we are thinking in longer-term. it is more to do with how the company's monetize and how it is going to introduce its new services right now it is going to be about how they innovate. a lot of these companies get grouped together. they are all uniquely different from one another. talk to us about alibaba. what is the 2019 story for the company? >> i like the story. i think it makes sense. they are trying to go off-line. that is a huge market right now. they did a very good case did -- case study. it is showing very good results. does it end up as a

zero-sum game? they go through this big rivalry with tencent and at the end of the day, is it a symptom of the market maturing? that will be a risk to the margin? >> i would not say it is wrong, there is good -- it is that that there is competition. first toas one of the begin investing in innovation. that is why they are really benefiting. it is actually positive that they are investing in new technology. , there are already results coming out. this latest talk about the internet. the are sharing their innovation side as well. who is number one in payments?

the simple answer would be alipay. both: is it big enough for to coexist? how big is the market? >> the market is quite large. it is a two player market. why should we only be spent with one form russian mark it is easy to justify two forms of payment. trend: we are seeing a where some of these tech companies are being targeted or accused of tax evasion from the government. how should we interpret this move? concerned about whether this is a regulatory tightening that we are's being --the sector area >> in my regulatory tightening in the sector. >> tencent has the online

gamers. i think the government is trying to take the concerns away and push them to innovate. that goes to tencent. they are putting pressure on the gaming business to spur cooperation with other sectors. innovation,lk about a lot of these new start up our ex-alibaba.ncent or are they providing a platform for better innovation? >> i think they are providing a large platform for innovation. they need to depend on innovators as well. they have a very large platform

and user base. innovation lot of and other independent parties to contribute as well. of the names latecomer you cover, what is your favorite right now? >> tencent. yvonne: breaking data coming out. david: we have the october home prices. country, 1%,ss the a little faster than the september pace of growth. getting some lines across different big cities. 1% month on month. we are waiting for a breakdown. for more on this, let's talk more. let's bring in our asia finance editor. he is here to talk about the

health of the markets. the number that we have just seen is very similar to last month's number. the markets.of there are multiple negative signs out there in terms of the flow of sales. analysts are saying that they think market has peaked. some very bearish forecast for next year. that number just feeds into that picture. yvonne: most people are expecting a policy easing. do you think there is an urgency to do that sooner than what was initially thought russian mark >> i'm not -- initially thought? >> they spent a long time building out these price controls across the country.

it really wants to change the from that booming market into something more mature and table. i think it will be very difficult for them. they need a strong property market for the economy, but trying to get a more mature market, there might be some reluctance. it is a fine balance that they have to strike. they need to keep it healthy and stamp out speculation. we have a chart. can we get it up? first tier, second-tier, other cities. the latest numbers are about 1%. this is where the frenzy to waste.

when you talk about chinese property, i would talking about big developers on a small developers? what is the main story currently in this market? >>when you talk about chinese property, i would talking the br developers. they have been saying that the financing landscape is the toughest it has been for years. it is going to be the small developers that are likely to struggle more. we are in that phase of consolidation for developers. smaller ones getting pushed out. that will be part of the ongoing story. also part of the big story is the government trying to reform the property market. it is so distorted. thank you. me togoing to get to tell

talk us through some of those numbers in just a little bit. let's get over to paul allen with an update. the changes on capitol hill after the midterm elections pose problems for president trump's trade deal. needs-called agreement changes and must be renegotiated. democratic concerns would likely be addressed by including stronger enforcement mechanisms. the first member of the migrant caravan has arrived in tijuana. another group is set to arrive in the coming hours. most migrants prefer to visit the border fence. one man dropped the u.s. side but quickly man back will be watched by agents.

for the first time since august, reaching its lowest in more than a year. it dropped as much as 15%. others also sell. 70% of itsdown about record in december. air quality in beijing and the acted to remain the worst in 18 months on thursday with particulates soaring to 11 times . levels recorded in california during the wildfires. reached 761 in march 2010. that is 25 times safety levels. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

let's bring you some live pictures out of singapore. we are expecting to hear from vice president mike pence. delivering those remarks and bring them to you when they come in. david: we will be back here, so do not go away. this is bloomberg. ♪

david: president trump trade war is making the southeast asian nations a little more attractive. especially there manufacturing base. listen in. inquiriesreceiving from locators from both countries and looking into the philippines for manufacturing.

we managed the risk. region leaders meeting in singapore. >> we have done pretty good work this year. we are coming in the next session. there will be an announcement about the final stage. you know what all this means? it means our chief international correspondent haslinda amin is the busiest person on tv this week. what are the key takeaways so far? much freepretty trade. that free trade has to continue.

multilateralism has to continue. america first. juxtaposed against each other. i think the sense is that we have to keep pushing to ensure that globalization is not a setback. earlier this morning, i spoke with the prime minister of new zealand. she had the opportunity last night to sing the same tune to the vice president of the u.s. she was seated next to him on his wife. she made sure she pushed for new zealand's exemption from tariffs when it comes to steel and aluminum. effect onaving an by sayingonfidence what is happening as a result of the trade conversations going on

, that it might be having an impact on global growth. we want to make sure that if the world needs this, new zealand does not catch a cold. benefit for tit-for-tat trade war. around keep pushing hard abiding by trade rules and agreement that we have signed up to. stalled. rcep has been it is not likely to be end of next year. what caused that? pm arden: you're looking at 2019. we have several chapters that are looking good, but there is more conversation to be had. it is a lot about balancing pace with quality. we want to see these additional benefit.

i will keep pushing for what has already been negotiated but see if we can push a little further. it is a significant agreement and will demonstrate the benefit that could be derived from us having these multilateral agreements. haslinda: is it being driven by china? pm arden: that is not a concern from our perspective. making sure that we do not sacrifice quality for pace, particularly given it has had it a link the just station. president -- president trump himself did not turn up. some clarity and commitment from him. what do you make of his absence? was it a miss take? leaders make a call at different forms available at any given time. having the presence of the vice

president was also incredibly important. making the most of that contract and the ability to have a conversation. some of the ambition as well. it has been a hot topic of conversations for a lot of us. the prime minister speaking with us. all working towards the opening of trade. it has to continue. trade deals are working towards that. david: a lot of them have really have --ike pence and we the indonesian president also pushing. lots more coming from singapore. let's take a look at markets right now. we are trying to figure out

within this list that you see. the stocks are seeing some substantial downside. a big one here today. take a look at some of these property -- properties. it was a similar trend that sign -- signs of cooling in the month of october. we are seeing a slight upside with some of these property stocks. we will see how things go as they trickle down. ♪

yvonne: a quick check of the

headlines now. planning to offload remaining assets in the north sea worth about $3 billion. the sale would include the holding in the clearfield. says it is marketing its u.k. assets after receiving an unsolicited offer. there is no certainty a sale will happen. david: macy's slumping. pushing stock lower for a fourth day. the situation here, they plunged on management thing that margins with suffer because of rising costs. it is sticking to its full-year forecast. not repeat its august forecast of improving for quarter margins. tencent bought itself some time for its gaming business. billion.e reached $3.4

its slowest pace in three years as china clamps down on gaming licenses. david: short seller blue work that is taking aim. the company has already seen it stock plunge to more than 36%. we spoke to the blue or co-founder earlier, who told us there is more pain ahead. >> it purports to be china's third-largest e-commerce company behind alibaba and jd.com. we look at the wall street in a minute, but let's talk about your company, also known as pdd. it is the third-largest e-commerce company.

it has a $19 billion market cap. i have read your report. you are making it publicly available. a host of issues. give us your thesis. >> we are short for four reasons. andrevenues are understated that losses are greater than they reveal. we think the headcount is substantially larger than what they tell investors. undisclosed third-party and we think their headline is widely exaggerated. let's cut to the chase. andstock is trading at $17 change. it is down from a high of 30 in september. what do you think it is worth? pricedo and adjusted sales. we think we are being generous.

i think investors are confusing popularity with profitability. there is value and we think it is trading at a rich valuation. it's overall performance and the transaction values. >> that takes us to what number? >> between seven and eight dollars. ofid: that was the founder blue or go. comment andut for nothing so far. let's look at what is coming up on the program. the numbers were out. we will dissect and get an analysis on the property market, including why investors are feeling less love for the area. yvonne: assessing the rise in hedging in china with investment partners. we have seen innovative ways

that these companies are trying to repay their creditors, the likes of airline vouchers. we will talk about that next. this is bloomberg. ♪

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